By Boo Chanco (DEMAND AND SUPPLY) | The Philippine Star | August 20, 2014

The last time I asked DOTC Sec. Jun Abaya when government plans to complete the buyout of the private owners of MRT 3, he texted back: “we are awaiting DOF on the buyout. Hope we can execute within the year.”

So I sent Finance Sec. Cesar Purisima a PM on Facebook asking him about it. He has not replied after four days. Normally, Sec. Purisima is quick to reply to my queries. I suspect he does not know how to answer me so it was better to ignore me.

A government buyback of the full ownership of MRT3 is the cleanest way of initiating any real rehab of the system. What the government now owns through some government banks is just some 80 percent of the economic rights. The equity or ownership rights are still with the original private sector builders of the system.

President Aquino signed EO 126 last year instructing DOTC and the Department of Finance (DOF) to buy out MRT 3 from MRTC in accordance with the build-lease-transfer (BLT) agreement covering the system.

The Department of Budget and Management (DBM) has set aside a P56-billion budget for the complete government takeover of the MRT3 in the 2014 national budget. DOTC and DOF has done nothing all thus time.

Sec. Jun Abaya keeps on saying that government will buy out the system but that seems to be just talk. MRTC officials claim Sec. Jun has not even found the time to sit down with them to discuss this buyout or any other matter concerning MRT3.

Buying out MRTC is important if government is serious about rehabilitating MRT3. Let me explain…

The MRT3 system was built and financed by a private sector company, MRTC that is fully owned by MRT Holdings. It turned over the completed rail line to DOTC, which is supposed to run it and pay lease to the private owners.

Keeping the system maintained and even buying new rolling stock among others is supposed to be done by MRTC. But government has taken over these functions. MRTC and DOTC have different stories on how this happened.

MRTC claims they aren’t even allowed to conduct a technical audit of the system. Government denies that.

MRTC acknowledges that they got a verbal yes from DOTC to here experts to inspect the maintenance of the system. But when they flew in experts from MTR Hong Kong at some expense, the audit team was not allowed entry to the MRT depot by then MRT GM Al Vitangcol.

There is, however, good news. I have just been informed that the new MRT GM Honorito Chaneco has agreed to the inspection. According to an official of MRTC, “we convinced him that it was for his own good to have an audit done right away.

“Even then, it took almost two months of pushing before DOTC agreed. The MTR HK team will be in town by next week to conduct the audit which is expected to take 72 man days.”

MRTC claims government had been delayed in paying its lease obligation, leading to an arbitration case still pending in Singapore. MRTC also sued locally when DOTC decided to buy new rail cars without its consent as provided in the original BLT agreement. MRTC lost this case.

One would imagine that they should at least start to negotiate because Sec. Abaya already announced possible conclusion of a deal before the end of this year. But DOTC is not even talking to MRTC about the buyout.

No one could give me a good estimate of how much government must pay MRTC to complete a buyout. The rough figure I am hearing is $1 billion. The fact that DBM provided P56 billion in this year’s budget for the buyout seems to indicate a billion dollars is the ballpark figure.

So that’s a billion dollars just to take full control of a totally dilapidated system that requires total reconstruction outside of the civil works. We are talking of new trains, a new signaling system, rehab of the carriageway and electrical system.

This makes me wonder why then DOTC Sec. Mar Roxas boldly announced government would undertake the rehab of MRT3 as he rejected the offer of Manny Pangilinan to do it at no cost to the government. MVP also promised to take away the legal problems because he has an arrangement with the original owners.

The story I heard is that Mar presented MVP’s offer to P-Noy, who supposedly remarked, “Baka naman masyadong yumaman si Manny dyan.” Mar took that as a no and proceeded to announce the rejection of MVP’s offer.

That was almost four years ago. If they took MVP’s offer then, we would not have the problems we have now. Or at the very least we would have been on our way towards rehabilitating MRT 3. Nothing has happened to this day.

But I was also told the DOTC insiders were against MVP’s offer anyway. I am guessing that is possibly because rehabilitating MRT 3 involves a lot of juicy contracts. I was not surprised that after they rejected MVP’s offer, the questionable maintenance contract happened and the unfortunate Inekon story came out. That’s a mockery of Daang Matuwid.

Last week, Sec. Jun Abaya had three unfortunate accidents at MRT3. The first one in Pasay injured scores of passengers. The second one merely caused inconvenience when a train stalled near Santolan. The third involved another stalled train near Buendia. Strike 3 na si Sec. Jun.

Last Monday, there was another reported MRT stalling plus a stalling of a PNR commuter train. PNR is also under DOTC. As a former military man, Abaya should be familiar with the concept of command responsibility.

Sec. Jun is now at the receiving end of very bad comments in social media. MRT’s despicable condition is experienced daily by metro residents who ride it. They resented the comment of Sec. Jun that riding the MRT is a personal choice. Many took that to mean Sec. Jun effectively said, bahala kayo sa buhay nyo… which reminded them of Mar Roxas in Tacloban after Yolanda.

Two things must happen quickly if we are to safeguard the safety of MRT3 commuters. First, government must complete that buyback so they can start the rehab in earnest, or reconsider MVP’s offer if it still stands. Second, Congress must put up a National Transportation Safety Board or NTSB as they have it in the US.

The value of NTSB becomes clear after Sec. Abaya quickly blamed the Pasay accident on the train drivers even before a full investigation. Sec. Jun said the drivers seem to have broken some protocols. Abaya said with a straight face that maintenance isn’t the likely cause because DOTC maintains the system by the book.

Assuming for the sake of argument that the drivers broke protocol in responding to the situation of a stalled train, the train shouldn’t have stalled if it was properly maintained. MRT trains stalled not once but four times in a space of less than a week, indicating something wrong with maintenance… or maybe they have been hiring too many incompetent drivers. In either case, MRT government management is to blame.

With the fact that Sec Jun already has a pet theory on the accident’s cause, how can a DOTC committee that reports to him say otherwise? A fully independent NTSB will give us a better idea of what happened.

The NTSB is also a better investigator of aviation mishaps rather than CAAP. Failure of regulation can cause accidents as seems to be the case in the Robredo crash. There is a clear conflict of interest between CAAP, the regulator, and CAAP, the accident investigator.

Making sure there is readily available and safe public transportation is a responsibility of government. This is one big area where government is visibly and miserably failing. The President must act decisively before a bigger catastrophe happens.